Substantial Holder Notices – Increases in Voting Rights under Exemptions from the Code

Published 1 October 2014

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The Panel executive monitors substantial holder notices on the NZX website for increases in the holding or control of voting rights by shareholders in listed Code companies.

From time to time, a substantial holder notice identifies an increase in the holding or control of voting rights that could, but for an exemption, be a breach of the Code. When the Panel executive sees such a notice, it will typically write to the party that has given the notice and ask for an explanation, because almost invariably there is no mention that an exemption has been relied on for the increase.

While reliance by a shareholder on a recently granted individual exemption is usually obvious, reliance on a class exemption is not usually apparent. Legal advisers can assist the efficient monitoring of Code compliance by stating in the substantial holder notice that the relevant increase in voting control is permitted under a particular class exemption.